Allowance for Doubtful Accounts Has a Debit Balance of $980

question 26

Multiple Choice

Allowance for doubtful accounts has a debit balance of $980 at the end of the current year (prior to adjustment) . An analysis of the accounts in the customers' ledger indicates uncollectible accounts of $16,000. The adjusting entry would require a credit to:

• A)bad-debt expense for $16,980.
• B)allowance for doubtful accounts for $16,980.
• C)allowance for doubtful accounts for $15,020.
• D)accounts receivable accounts for $15,020.

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Definitions:

Marginal Revenue

The extra revenue earned by selling an additional unit of a product or service.

Marginal Product

Marginal product is the increase in output that arises from an additional unit of input, assuming all other factors are held constant, illustrating the production efficiency gains.

Optimal Employment

Refers to the level of employment where the marginal productivity of labor equals the real wage, leading to maximum efficiency in the labor market.

District Court

A type of trial court that has jurisdiction over specific types of cases within a defined geographic area.